Long-time Abilene attorney Hank Royer believes the Board of Directors of Memorial Health System violated the Kansas Open Meetings Act in its investigation of an affiliation with Salina Regional Health Center.

At Tuesday afternoon’s regular meeting at Nichols Eduction Center, Royer said he asked and received all of the minutes of the board and there was no mention of a special meeting or executive session with the board and officials at Salina Regional.

While the Kansas Open Records Act does not require minutes of meetings, all executive session motions must be recorded.

Royer, along with three other members of the public, had three minutes to asked questions about the affiliation and the Letter of Intent. Some of those answers were given in a presentation by Elgin Glanzer, chief financial officer, while other questions are still unanswered.

At the August meeting the board approved a Letter of Intent to join an affiliation with Salina Regional, somewhat similar to that of hospitals in Concordia and Lindsborg.

Royer said the Letter of Intent was signed on July 23. 

“I asked for a copy of all of the board minutes for the last year,” he said. “I got copies of 15 sets of minutes plus your comprehensive plan from 2019. I’ve read it all. First of all, I don’t think I got everything because there are no records of a meeting where you all traveled over to Salina to meet with Salina Regional Health Center or up to Concordia. The minutes are missing. I think that is a violation.”

Board minutes

He said none of the minutes he received reflect a discussion about an affiliation. The Kansas Open Meetings Acts also require official action to be held in meetings open to the public.

“There was no authorization for Harold (Courtois, chief executive officer) and Steve (Chairman Schwarting) to sign this Letter of Internet on July 23, 2020,” he said. “Nowhere was that authorized.”

Royer said the letter wasn’t approved until the August meeting.

Schwarting referred the question to attorney Jim Angell, who became the board’s attorney in August because former attorney Peter Johnson also represents Salina Regional Health Center.

“Jim, would you like to respond? Was that an illegal meeting when we went to Salina Regional?” Schwarting asked.

Angell said he has reviewed the meetings and continues to review the meetings. 

“If there was some sort of violation, it is simply a technical violation,” he said. “He said the LOI is nonbinding. That is a different issue.”

According to the Kansas Open Meetings Act, notice of meetings must be (individually) provided to those requesting notice. All meetings subject to the KOMA must be conducted openly ­— that means that the public must be allowed to listen to the discussion.

He said that Courtois as the CEO has the capacity to sign the Letter of Intent. 

“We are still exploring different ways to structure the deal,” Angell said. “Right now we are just exchanging info. We haven’t got past exchanging info.”

Royer said he didn’t want the complaint to go further. 

“I could stir this up,” he said.

Royer asked the board not to commit to the affiliation until May 2021.

Schwarting said the board has spent days looking at the affiliation and what the issues are.

Health care changes

Royer said health care could change after the election.

“This isn’t based on any of the changes that might be coming this week, next month, in March. There are changes that come every day from the Federal government that we have no control over,” Schwarting said. “This faces issues that we think, at this point, that we need to be part of a larger organization, part of it for the reimbursement.”

One concern was if specialists outside of Salina Regional Health Center would continue to serve patients in Abilene at Memorial Health.

“That is an important point and we are going to guarantee that it can continue,” Schwarting said. “That is part of the culture of Abilene that we want to keep.”

Angell said there will be some guarantees.

“We don’t know what that list is but we will have a list of non-negotiables. We won’t allow that to happen,” he said. “If we get to the affiliation, documents will be set up in a way that there are certain non-negotiables that will have to stay with the community. The board won’t let us. The board is here to protect. That includes a litany of issues that we don’t have ironed out right now because we are not at that stage yet.”

Courtois said he felt the investigation wouldn’t be complete until at least February.

“There is no guarantee that we will do it,” he said of the affiliation. “At this point we are really jumping the gun because at the point that we know things that we can talk about, we’ll have focus groups and town hall meetings to explain to the public. I think a lot of these questions are things we need to sort through.”

Schwarting said there will be an exit clause in any agreement.

“If it doesn’t work out for us, there is a structure for us to leave,” he said. “If we were selling, that would be a different story. If we were merging, that would be a different story.”

Why affiliate?

Glanzer said in taking a look at the last five years of Memorial Health System’s financial performance, four out of those years operated in the red.

“That suggests we need to look at this,” he said.

He said there was a $1 million profit in 2010 which gradually declined over a period of time to negative figures.

He said there was a profit in 2018.

“When our auditor presented the 2018 financials to us, they said there were three home runs that you had and there were a bunch of base hits to make that happen,” Glanzer said. “Unfortunately we were unable to duplicate that in 2019.”

Glanzer said those losses have been sustained because of healthy cash reserves. 

“This decision is not about the next year, not about the next two or three years even. It’s really about the next 10 to 20 years,” he said. “This is a decision to reverse the trend that is taking place here in a way that can sustain us over the long haul.”

He said the bottom line needs to get back to at least a break even point.

Glanzer said a new hospital was built in 2013 and $24 million was borrowed.

“It was absolutely the right thing to do,” he said. “We have competitors on the east and on the west that have new facilities. Borrowing that money was a very important thing to do.”

However, it did cause additional expenses.

Glanzer said there could be an increase in reimbursement though affiliation.

“We are going due diligence to see what this looks like,” he said. “We could change our structure and get paid better by the Federal government.”

He said it potentially could be a “very significant” dollar amount.

He said affiliation changed the formula enough for Concordia to build a new hospital. 

Courtois also said the Federal government is leaning toward a global payment system.

“It changes a fee for service type of arraignment to a global payment and preventive health,” he said. 

The previous three years of Medicare activity will be averaged and paid for the year, regardless of patient volume.

“Now you can spend more time with your patients trying to keep them healthy,” he said.

“What is going to happen in the future, we don’t know,” he said. “People say why would you do this when you don’t know what is going to happen. We haven’t known what’s going to happen for 20 years. Every year it’s a different ballgame.”

Contact Tim Horan at editor@abilene-rc.com.

Contact Tim Horan at editor@abilene-rc.com.

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